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Are Options The Way?

OptionTrading

    Options are priced as though it were a Zero-Sum Game. In theory the stocks should only be in a position to move in one particular direction the total cost of the Call and Put premiums for the time period. So if a stock is at $50 and the $50 Options are both priced in the region of $2.50, the Options price say that the stock should stay in a range all the way from $45 to $55.  By purchasing both, we look for a move below $45 or above $55. If the $50 Call and Put cost 25 cents each, the market is expecting a move not much larger than lows of $49.50 to a high of $50.50. … [Read more...]

Use Options To Make Money

Option Traders

    Options are contracts wherein the buyer gets the right to buy or sell financial assets like stocks at a pre-specified price and on or before a specific date, but without being obligated to do so. Before wading into this, it's important to choose a strategy and a reason for why it should be done. Both these things are important, and explained in detail below. There are two types of options, known as calls and puts. Under a call option, traders get the right to buy the stock if it hits the strike price when the contract is in force. With a put option, traders will have the … [Read more...]

Cool Forex Tips And Thoughts

forextrading1

If you've got some supplemental income you can release yourself from worry as millions are currently worrying about their finances. Have a go with forex trading to supplement the income you already have. For instance, even though it might be enticing to change the stop loss points, doing that just before they're triggered will end in larger losses for you than if it had been left as is. Stay with your original plan, and success will find you. As a amateur Forex trader, you want to map out how you'll use your time. Use time charts to figure out how to get in and out in just a few hours. … [Read more...]

Selling Covered Calls On Emerging Markets And Gold Using ETFs

Gold Stock

    Exchange traded funds (ETFs) are collections of stocks that trade like a single stock. Many of them are optionable (meaning there is a market for options on the ETF) so you can use them for covered calls. They make sense for covered call writers because of the inherent diversification they provide (especially true in smaller accounts that may not have the capital to buy several different stocks for proper diversification). There is no single-stock risk with an ETF. If one of the member stocks drops suddenly then the effect will be felt less by the exchange traded fund that … [Read more...]

Options Trading Vs Stock Trading

OptionTrading

    Options trading can be very rewarding. Because options are leveraged investments they hold the potential for substantial profits or losses in a relatively short period of time. If you are correct on a stock's direction, and if your timing is good, you can do quite well. However, because options are a decaying asset that loses value over time, you have to be disciplined. There are two kinds of options: calls and puts. In both cases they have a 'strike price' and an 'expiration date'. But a call option represents the right to buy stock, while a put option represents the … [Read more...]